BMZ ACADEMY
BMZ ACADEMY
@061 262 1185/068 053 8213
BMZ ACADEMY 061 262 1185/068 053 8213
, BMZ ACADEMY
Table of Contents
QUESTION 3.1: CAPACITY MANAGEMENT ......................................................................................... 4
3.1.1 Refer to case study 1. ................................................................................................................... 4
3.1.2 Refer to case study 1. ................................................................................................................... 5
3.1.2.1 In context of LIFT airlines, demonstrate your understanding of this statement. {4}................. 5
3.1.2.2 How can economies of scale be of benefit in long-range capacity plans? {2} ......................... 8
3.1.3 Refer to case study 1. ................................................................................................................... 8
3.1.3.1 With reference to the four capacity expansion strategies, which type of capacity expansion
strategy should LIFT follow? {1} .......................................................................................................... 8
3.1.3.2 Analyse your chosen in context of that strategies’ risks and benefits for LIFT airlines
specifically. {2} .................................................................................................................................... 8
3.1.3.3 Provide a motivation for the strategy you have selected. {2} ................................................... 9
3.1.4 Refer to case study 1. ................................................................................................................. 9
QUESTION 3.2 PROCESS ANALYSIS AND RESOURCE UTILISATION.............................................. 12
QUESTION 3.3: MANAGING INVENTORIES IN SUPPLY CHAINS ..................................................... 13
3.3.1 Refer to case study 1 .................................................................................................................. 13
3.3.1.2 With reference to LIFT airlines, what is the relevance of static and/or dynamic demand.
Motivate your answer. {2} ................................................................................................................... 13
3.3.2.1 Differentiate between a fixed-quantity system and a fixed-period system, as two different
systems for ordering inventory. {2} .................................................................................................... 14
3.3.2.2 In context of ordering on-flight snacks and beverages for the central stores at each of the
three airports, provide an analysis of which of these two systems would be more appropriate for
LIFT airlines. {3} ................................................................................................................................... 14
QUESTION 3.4: SUPPLY CHAIN MANAGEMENT AND LOGISTICS ................................................... 15
3.4.1.1 Using your own words, describe the bullwhip effect. {2} ..................................................... 15
3.4.2 Refer to case study 1. ................................................................................................................. 16
Internal Supply Chain Metric: Aircraft Turnaround Time .................................................................. 17
3.4.2.2 Describing the relationship between the two metrics you have chosen. {2} ...................... 18
3.4.3 Refer to case study 1. ................................................................................................................. 18
3.5 RESOURCE MANAGEMENT .......................................................................................................... 20
3.5.1 Refer to case study 2. ................................................................................................................. 20
BMZ ACADEMY 061 262 1185/068 053 8213Page 2 of 32
, BMZ ACADEMY
3.5.2 Refer to case study 2. ................................................................................................................. 22
3.5.3 Refer to case study 2. ................................................................................................................. 28
3.6 OPERATIONS SCHEDULING AND SEQUENCING ....................................................................... 28
IMPORTANT NOTES TO CONSIDER ........................................................................................................ 31
BMZ ACADEMY 061 262 1185/068 053 8213Page 3 of 32
, BMZ ACADEMY
QUESTION 3.1: CAPACITY MANAGEMENT
3.1.1 Refer to case study 1.
“Capacity can be viewed in two ways, as the maximum rate of output per unit of time,
or as units of resource availability”. With reference to the relevant theory, as well as
aeroplane capacity at LIFT airlines, demonstrate your understanding of the above
statement. (3)
Capacity, when viewed as the maximum rate of output per unit of time, refers to the
peak output that can be achieved in a given timeframe. This concept is crucial in
operations management, where capacity planning aims to ensure that the production
or service system can meet the demand efficiently without excessive delays or
overuse of resources. Capacity refers to the inherent ability of a manufacturing or
service resource, such as a workstation or equipment, to fulfil its intended function
within a designated timeframe (David, 2017). Operations managers are responsible
for making informed decisions regarding the optimal levels of capacity to effectively
meet both current short-term and future long-term demand.
The maximum rate of output per unit time is determined by the long-term objectives in
operations, as firms strive to grow and expand in order to meet the long-term demand
(Collier & Evans, 2017). On the other hand, the allocation of resources is based on the
premise of short-term capacity planning, as it is necessary to utilise the available
resources in accordance with the patterns of demand. Capacity management refers
to the ability of a hospital operation to maintain a level of output that allows for efficient
service delivery. In other terms, it pertains to the measure and efficiency with which
the business can deliver, taking into account all factors in accordance with David
(2017).
When considering LIFT airlines, resource availability could include the number of
operational aircraft, the availability of flight crew, and the capacity of airport facilities
such as gates and check-in counters. For example, if LIFT has 10 aircraft and each
aircraft is capable of operating 5 flights per day, the resource availability would limit
BMZ ACADEMY 061 262 1185/068 053 8213Page 4 of 32
BMZ ACADEMY
@061 262 1185/068 053 8213
BMZ ACADEMY 061 262 1185/068 053 8213
, BMZ ACADEMY
Table of Contents
QUESTION 3.1: CAPACITY MANAGEMENT ......................................................................................... 4
3.1.1 Refer to case study 1. ................................................................................................................... 4
3.1.2 Refer to case study 1. ................................................................................................................... 5
3.1.2.1 In context of LIFT airlines, demonstrate your understanding of this statement. {4}................. 5
3.1.2.2 How can economies of scale be of benefit in long-range capacity plans? {2} ......................... 8
3.1.3 Refer to case study 1. ................................................................................................................... 8
3.1.3.1 With reference to the four capacity expansion strategies, which type of capacity expansion
strategy should LIFT follow? {1} .......................................................................................................... 8
3.1.3.2 Analyse your chosen in context of that strategies’ risks and benefits for LIFT airlines
specifically. {2} .................................................................................................................................... 8
3.1.3.3 Provide a motivation for the strategy you have selected. {2} ................................................... 9
3.1.4 Refer to case study 1. ................................................................................................................. 9
QUESTION 3.2 PROCESS ANALYSIS AND RESOURCE UTILISATION.............................................. 12
QUESTION 3.3: MANAGING INVENTORIES IN SUPPLY CHAINS ..................................................... 13
3.3.1 Refer to case study 1 .................................................................................................................. 13
3.3.1.2 With reference to LIFT airlines, what is the relevance of static and/or dynamic demand.
Motivate your answer. {2} ................................................................................................................... 13
3.3.2.1 Differentiate between a fixed-quantity system and a fixed-period system, as two different
systems for ordering inventory. {2} .................................................................................................... 14
3.3.2.2 In context of ordering on-flight snacks and beverages for the central stores at each of the
three airports, provide an analysis of which of these two systems would be more appropriate for
LIFT airlines. {3} ................................................................................................................................... 14
QUESTION 3.4: SUPPLY CHAIN MANAGEMENT AND LOGISTICS ................................................... 15
3.4.1.1 Using your own words, describe the bullwhip effect. {2} ..................................................... 15
3.4.2 Refer to case study 1. ................................................................................................................. 16
Internal Supply Chain Metric: Aircraft Turnaround Time .................................................................. 17
3.4.2.2 Describing the relationship between the two metrics you have chosen. {2} ...................... 18
3.4.3 Refer to case study 1. ................................................................................................................. 18
3.5 RESOURCE MANAGEMENT .......................................................................................................... 20
3.5.1 Refer to case study 2. ................................................................................................................. 20
BMZ ACADEMY 061 262 1185/068 053 8213Page 2 of 32
, BMZ ACADEMY
3.5.2 Refer to case study 2. ................................................................................................................. 22
3.5.3 Refer to case study 2. ................................................................................................................. 28
3.6 OPERATIONS SCHEDULING AND SEQUENCING ....................................................................... 28
IMPORTANT NOTES TO CONSIDER ........................................................................................................ 31
BMZ ACADEMY 061 262 1185/068 053 8213Page 3 of 32
, BMZ ACADEMY
QUESTION 3.1: CAPACITY MANAGEMENT
3.1.1 Refer to case study 1.
“Capacity can be viewed in two ways, as the maximum rate of output per unit of time,
or as units of resource availability”. With reference to the relevant theory, as well as
aeroplane capacity at LIFT airlines, demonstrate your understanding of the above
statement. (3)
Capacity, when viewed as the maximum rate of output per unit of time, refers to the
peak output that can be achieved in a given timeframe. This concept is crucial in
operations management, where capacity planning aims to ensure that the production
or service system can meet the demand efficiently without excessive delays or
overuse of resources. Capacity refers to the inherent ability of a manufacturing or
service resource, such as a workstation or equipment, to fulfil its intended function
within a designated timeframe (David, 2017). Operations managers are responsible
for making informed decisions regarding the optimal levels of capacity to effectively
meet both current short-term and future long-term demand.
The maximum rate of output per unit time is determined by the long-term objectives in
operations, as firms strive to grow and expand in order to meet the long-term demand
(Collier & Evans, 2017). On the other hand, the allocation of resources is based on the
premise of short-term capacity planning, as it is necessary to utilise the available
resources in accordance with the patterns of demand. Capacity management refers
to the ability of a hospital operation to maintain a level of output that allows for efficient
service delivery. In other terms, it pertains to the measure and efficiency with which
the business can deliver, taking into account all factors in accordance with David
(2017).
When considering LIFT airlines, resource availability could include the number of
operational aircraft, the availability of flight crew, and the capacity of airport facilities
such as gates and check-in counters. For example, if LIFT has 10 aircraft and each
aircraft is capable of operating 5 flights per day, the resource availability would limit
BMZ ACADEMY 061 262 1185/068 053 8213Page 4 of 32
